The PPP loan is exempt from Federal taxation and to most states. California, for one, conforms to Federal taxation and therefore, PPP loan is non-taxable For taxable years beginning on or after January 1, 2020, California provides an exclusion from gross income for covered loan amounts forgiven under the federal CARES Act, Paycheck Protection Program and Health Care Enhancement Act, or the Paycheck Protection Program Flexibility Act of 2020.
See, ftb 2019-2020 legislation, link.
